There’s plenty of excellent retirement advice out there, but not all suggestions will work well for you. As reported by U.S. News and World Report, there are four common suggestions from retirement advisors don’t make sense, and can set your retirement plans back:
1/ Use your house as an ATM machine: No matter how much your home has increased in value, using it as a cash dispenser is rarely a good idea. If you decide to sell your home and cash out the money, once legal fees, commissions, moving costs and the purchase or rent of a new property is included, there won’t be enough money to last for an entire retirement – at least, not for most people.
2/ Don’t save now- wait later: Time is the best tool for retirement. Thanks to the power of compounded interest, a 25 year-old who starts saving for retirement can have multiple times the savings of someone who started at 45 years old.
3/ Your money doesn’t need to grow in retirement: After you stop working, most people lose their biggest source of income, so it becomes even more important to ensure that not only can you withdraw your retirement savings, but that the money grows.
4/ Stick with the four percent rule: The four percent rule states that you should withdraw four percent of your money every year in retirement. However, the U.S. News and World Report article found that in 71 percent of simulated scenarios, retirees would run out of money during their retirement.
When it comes to online financial advice, the more you research, the better prepared you are.